A laptop recently appeared on my desk with these exact symptoms. I was pretty stumped by it.
Not being paid enough to figure out the problem, I managed to revive the recovery partition (Windows 7 had removed the boot entry for it, but hadn't deleted it thankfully) and restored Windows Vista.
The client wasn't interested in the operating system on the machine, they simply requested that I "fix it"
It seems the upgrade attempt was performed by the client's son in an attempt to "fix" the machine which was plagued with slow startup time and a healthy dose of unnecessary applications running. I don't have any details about the 7 install that was used, but it seems that it wasn't a retail copy.
This would have been a perfect candidate for one of those Clean Installs that Microsoft recommends, but for some odd reason, the contents of the My Documents folder was deemed too valuable to simply copy to a flash drive while the system was upgraded.
I'd be very curious to know more of the specifics about this problem. The machine I had worked on was running a 32bit version of Vista Home Premium, OEM Gateway.